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The American Dream Is a Financial Nightmare

The year was 2001, I was 21-years-old, with one semester of college left. I wasn’t taking school very serious anymore, so me and my roommate we were going through cases of Natural Light beer every week. While I was having fun celebrating the last days of fraternity life, I was also looking forward to the next stage of my life – a nine to five job I had accepted in Madison, Wisconsin.

After graduation I made the move from Illinois, settling into a run-down studio apartment in a seedy neighborhood. It was cheap at $425 a month, but I was so broke I had to borrow the security deposit and first month’s rent from my mom. Nevertheless, I was excited because I’d finally be making adult money; here’s my very first paycheck:

With good money coming in, I decided to buy a new car because I was embarrassed to pick up dates in my 13-year-old Chevy Celebrity that was rusting everywhere. Looking back, I realize I was following the life script that was ingrained in me: get a college degree, land a nine to five job, and buy a new car.

One year later my apartment lease was up, but I chose to renew even though my finances had stabilized and I could afford a nicer place (people were smoking marijuana and playing dice in the hallways). The following year I found a better job, and moved downtown to an upscale 650-square-foot apartment with a lake view.

But a swanky apartment wasn’t enough; to show everyone I was successfully navigating adulthood, and to keep on track, I needed to buy a house. So I saved for a down payment, creating automatic monthly transfers of $1,000 from my checking account to an online savings account. That put the money out of reach so I couldn’t spend it. Three years later I had saved $40,000, enough for a 20 percent down payment on a $200,000 house.

It’s now 2006, and I was 26-years-old, ready to achieve the American Dream of buying a house. I signed over all my hard-earned money, and that was probably the worst financial decision I’ve ever made.

Recently, many people have emailed to say, “I finally have enough money to buy a house,” or “I’ve lived in an apartment for 10 years, it’s time for me to buy.” Like those people, and probably you too, I thought I was making the best decision to buy, but I hadn’t done any homework, or the math.

I naively believed:

Renting is just throwing money away

A house always appreciates in value, so it’s one of the best investments for the money

It was my own fault for not becoming an informed buyer, but I also felt the social pressure:

Buying is the next step in the life script, after a college degree, a nine to five job, and a new car

Our parents tell us we should be buying

Our friends are buying, and they’re asking us when we’re going to

As it turns out, what I believed about buying was flat-out wrong, and because I didn’t do the math for the biggest financial decision of my life, I’ll eventually realize two losses – the property selling for less than what I paid, and the potential profit from putting the $40,000 to work for me.

Belief #1: Renting is throwing money away

The Times has a beautiful calculator to help determine if it’s a better financial choice to rent or buy, and I think it’s a great litmus test to steer you in the right direction.

But the issue I have with that calculator is it doesn’t factor in the soft costs of owning a house:

Your time. Just like money, time is a resource, and you’ll spend it: researching problems with your appliances, calling electricians and plumbers, and then waiting around for them, fixing small issues with hand tools, taking trips to the home improvement store, mowing the lawn, removing snow, etc.

If we reasonably assume our time is worth $20 an hour, and we’ll spend 8 hours a month on those things, that’s $2,000 a year in labor that renters save.

Reduced flexibility. It’s way more difficult to move for a better job, and that job could be across town – a longer commute you don’t want – or in a different city. Either way, you won’t make the best decision for your career because you become financially, and emotionally, tied to your house.

Plus, with a house you’re still throwing money away; keep your checkbook open for property taxes, homeowner association fees, maintenance, replacing things when they break, and then break again, replacing the roof, and keeping it up-to-date. You can figure to spend up to 50% of your mortgage payment on those things.

Belief #2: A house is the best investment

Historically, it’s a bad one.

The mistake people make is when they hear someone say, “I bought my house in 1987 for $230,000, and today it’s worth $1 million,” and then think a profit of $770,000 over 28 years sounds pretty good.

But if we calculate the compound annual growth rate over that timeframe it’s 5.39 percent. The stock market – the S&P 500 – returned 10.45 percent. Here’s what that 28-year difference looks like:

Housing has always had a terrible track record as an investment – from 1890 to 2012, the inflation-adjusted return (i.e. taking inflation out) on residential real estate was 0.17 percent. That means a house purchased for $5,000 in 1890 would be worth $6,150 in 2012.

Over the same time period the stock market returned an inflation-adjusted 6.27 percent. That means a $5,000 investment in the market would be worth over $8 million. That’s called the opportunity cost – when you choose to use your money one way, rather than another.

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Fadi G

one thing to note though on the housing vs stock market chart you have is that no one is actually starting with 230K in the stock market. they are only doing the down payment plus month difference of rent vs mortgage payment. meaning your investment of 40K down would have turned into 770K profit where as who know what the stock market return would have been had you started with 40K and only a few hundred extra every month.

OhNoHeDidn’t

I get the pressure almost daily from friends and relatives. I’m in my early 30’s and have been renting cheaply in an expensive city for 10 years car-free (something to be said for loyalty and always paying your rent on time!). No way I’m moving out. My lifestyle is ridiculous. My girlfriend moved in and my rent is even more manageable now. She’s pro-renting but she’s starting to bow to the pressure and wants to save up for a down payment on a condo or at least revisit the idea when we are debt-free.
The shaming and social pressure to buy (and get a new car) is immense. When people are able to do anything they want, it’s a threat to a society that requires us to be debt slaves and do whatever the teevee box tells us to do. I’ve had lesser friends that drank the Kool-Aid resort to outright personal attacks on my living arrangement during petty arguments. These people are so house poor and live in such far-flung suburbs that they can’t afford to grab a beer without military-grade planning. But as usual, the best route is probably the one everyone else tells you to avoid.

Chris, I have liked many of things you tend to post about but in regards to this article about housing you are wrong. I will give you partial credit as it depends on a person’s situation. If someone is flexible about where they may want to live and work then renting can many times be an advantage. However, rents rise especially in the current economic environment. I knew that my wife and I wanted to live in the same area, close to family, as many people do. In that case buying can be way more beneficial. In fact your theory about real estate having poor returns is grossly incorrect and you let yourself lack major vision in today’s economy. What you and many financial advisers never tell the working public is that a bear market occurs every 5-7 years and normally lasts between 12-18 months. In fact the US stock market is currently experiencing the third longest bull market run in history. Now I’m not saying that every real estate purchase will appreciate because that depends on many factors but the sub-prime meltdown has only happened once in my 44 years and not every 5-7 years. Also you completely miss the fact that during Bush Jr Presidency laws were enacted that allow a single individual to live in a home as little as 2 years and keep any appreciation up to $250,000 tax free and up to $500,000 for a couple. Also, you leave out the fact that housing has a cost whether a person rents vs buys. I could go on and on but you get the gist. FYI, I worked in banking and investment field for over 15+ years (licensed series 7 & 66).

Hi Todd. You’re right, there are pros and cons on both sides. You and your wife made the decision that the pros – living in a certain area, and close to your family – outweighed any cons of buying. That’s a pragmatic approach to making the decision, and what I’d love everyone to do, rather than make a decision they’ll regret.

Historically speaking, real estate has had poor returns, based on Shiller’s housing data – the return between 1890 and 2012 was essentially nothing, it just kept up with inflation. Sure, within those 100+ years there are housing bull and bear markets, but overall the return has been a handful of percentage points lower than the stock market.

Thanks for leaving your thoughts, I appreciate your insight.

Scott L.

I believe Todd and Fadi touched on this, but you miss two major points in this article.

1. You do not start with the 230K when buying a home, therefore you would not be able to invest that amount of money.

2. That $230K would be paid over the course of the Loan repayment period(30 years) in the form of mortgage payments, while not having to pay for rent. With this, the end result would be the $1M home you refer to. On the other hand, you could invest the $46K down payment(20%) that you refer to with the 10.45% Compound Annual Growth Rate, the end result is only $745,000. That is with a very strong market during that time period, and having to make rent payments throughout those 28 years. (if it was $1,000 a month, that would be $336,000 during that amount of time).

I do not own a home, however I believe it is a very important piece of information you have left out. People do not normally buy homes in full with cash, therefore it is impossible and irresponsible to compare the 28-year end result of a home purchased on a loan, to the 28-year end result of an investment made in-full with cash worth the starting price of that home.

Otherwise, you would be correct. Investing $230K that eventually becomes $1M would not be as good as investing $230K that eventually becomes $3.7M.

Hi Scott, thanks for leaving a comment. What I wanted to show was a house might not be the best investment, even though most people believe it is. According to a 2014 Gallup poll, Americans think housing performs better than anything else – gold, stocks, savings accounts, bonds – when the data clearly shows otherwise.

You can clearly do the math, and for the biggest financial decision we’ll make in our lives, I want people to spend the time to do that, and to weigh the pros and cons.

Chris

Hi Chris & Scott, thanks for the input. I’d like to raise 3 more issues as I’m working through these questions in detail too. (i) What do you make of the tax deduction for mortgage interest? If you include this, I think Scott’s case is even stronger. (ii) I don’t think any bank would give you 4-1 leverage for stocks in the same way a they would for a mortgage. (iii) What about areas where housing prices really do never go down (eg. houses – not condos – in Wash.DC, NYC, San Fran?).

Hey Chris, housing is definitely a tax shelter, but the question is do you want to pay $1 to save 2 cents?

On the back of a napkin, let’s say you have an income of $85K, and you buy a $250K house. Typically you’d pay around $10K a year in mortgage interest that first year.

Based on the tax brackets, you’re going to pay 25% in federal taxes and about 6% in state (it varies), for a total of 31%, which translates to a tax bill of $26K.

But you get to deduct the mortgage interest, so you take your $85K in income and subtract the $10K in interest, meaning your new income is $75K.

Then, you take your $75K income and multiply it by your 31% tax rate, and you’re left with a new lower tax bill of $23K, meaning you save $3K, which you should factor in when you do the math.

Home prices on the coasts are always a bit of an anomaly due to things like job growth, federal interest rates, and building restrictions.

Prices there could stay high for months, even years, but people who buy take on more risk because the likelihood of a decline toward more normal valuations is higher.

NPAFromFLA

In your example the math actually equates to spending $1 to save $0.31 in taxes and $0.10 in equity, depending upon mortgage rate.

That being what it is, if renting, you are paying $1 to save $0.

This aspect of your argument is invalid.

Doug Ball

I think you have also missed an important piece of math. As you pay rent, the rent goes up year after year, a mortgage does not change. You pay off the mortgage with inflated dollars, thus making the mortgage less expensive. So why don’t you add the cost of housing to your chart to show that rental expenses go up while mortgage expenses go down? And eventually you don’t have any mortgage expenses while the rent goes on forever? Believe me, being retired and debt free is the greatest feeling in the world. One other note, no good investor puts all their eggs in one basket. I had the decision to make several years ago to 1) take the proceeds from my previous home and pay off the current mortgage and invest the balance or 2) invest all the proceeds and keep paying the mortgage. I chose the former. I can lose my entire stock portfolio but still have a roof over my head. To ignore the expense side of mortgage vs renting provides a false view of the future.

JS

This is a good point, but the only reason that purchasing a home has superior results in this example is because of the substantial amount of leverage employed. If you borrowed 80% of $230k and invested it in the S&P along with your $46k from day 1, your end results would have been spectacular. The downside is, of course, the risk of financial ruin if the market is down when you want to sell.

The problem with the comparison is that people don’t look at the leverage employed in a mortgage the same way as they look at other investment borrowing. When you consider it this way, borrowing that much money to invest in a single asset (even a less-volatile one like housing or bonds) is risky (as any underwater borrower would tell you).

Right! The problem is that people usually take all their saved money to use for a down payment – poof, it’s gone – plus take on the biggest debt in their life, in order to buy a house.

But with any investment, it’s wise to diversify to reduce risk, and when people choose to allocate all their money towards a house (including that sizable mortgage), they have zero diversification, and are tied investment-wise to their house’s value.

A house can be part of a portfolio, but it shouldn’t be the biggest, and only asset.

Adam_CT

Hi Chris. Thanks for sharing your story regarding your post-college years and housing choices. I have a similar story. I graduated, got a steady job, and bought a house at the age of 23. Unfortunately, that purchase came at the most inopportune time; early 2007, right before the housing bubble burst. My mortgage has been underwater for over 8 years, and the house is worth nowhere near what I paid for it in 2007.

This isn’t a sob story. I did make the prudent decision of buying a multi-family property, so I have had my mortgage subsidized by 1 or 2 tenants over the past years, which definitely helped. I also refinanced a few years back and reduced my interest rate significantly. But even if the house hasn’t been a significant financial burden, it has prevented me from pursuing other opportunities in other cities, as I have always felt ‘chained’ to my home.

I guess my advice here is to do your research before making a commitment of this magnitude. Figure out what your all-in monthly costs would be (mortgage, taxes, insurance, maintenance etc..) and then determine what an equivalent property in your area would rent for. If you can replace (or exceed) your costs for owning and maintaining the place, then you can keep financial flexibility, and in the end it will probably be a worthwhile investment.

Hi Adam! This is awesome because I think you really highlight how hard it is psychologically to make the most logical decision, to which I can relate. Owning a house isn’t the best option for me right now, but I know if I sold I’d take a loss of five to ten percent, so my immediate reaction is to wait. I had to counter by setting a timeframe.

Did you ever think about walking away?

Adam_CT

I never really thought about walking away, for a couple reasons. First, I still needed somewhere to live, and selling would not resolve this issue. Second, the house’s value ‘on paper’ doesn’t really matter until I need to liquidate the asset. Sure, maybe I didn’t give serious consideration to a few opportunities involving relocation because of my housing situation, but overall I think it is working out.

disqus_xflWm02tm9

I think buying a house depends on your life circumstances and lifestyle. A book I read recently called “Zillow Talk” calculated how long you planned to be in a certain location, rents, house prices, etc. to determine whether it was better to buy a house or rent.

That said, if you do choose to buy a house, don’t overextend yourself. If you want a fancy house save a large downpayment so you don’t have to struggle to make the monthly mortgage. Don’t fall in love with a house and overpay. Just keep looking and putting in offers until you get one. It’s just a place to live. There’s plenty of them out there. We feel the house we bought 31 years ago and still live in, along with our 5 single family home rentals have been a good investment for us because we have a lot of control over them. Much better than our 401ks where we have lost more money via the stock market than we can ever hope to make in several years. In addition, we are blue collar working class people so repairs aren’t really that big of a deal.

You have good points. Ideally a house is just a place to live, but people “fall in love” with property, which makes choosing the best option difficult. When they do that, it becomes psychologically impossible to make rational decisions. Just look at the people who could have walked away from underwater mortgages but instead continued to make payments into a property worth a fraction of what they paid.

george

Hi, Chris, really enjoy your website and appreciate all the personal stories and insights you share with us. I was lucky to buy a house in 2002 for only $300K and paid $50K as down payment, I rented out basement apartment (with separate entrance) for $900 monthly over the years and was able to save and invest. now I am almost mortgage free (the house is now worth >$750K) and have a diversified portfolio (stocks and ETFs) worth about $450K in my late 30s.
I think the key is not to overextend yourself when buying a house, don’t go for maximum loan banks are willing to lend you. I see too many people being house rich and cash poor these days.

Hi George. That’s a return of roughly 7.25% over those 13 years, whereas the market returned 6.75%. Plus you had the multi-tenancy working for you. In any event, the smart move is to diversify to reduce risk, and you’ve done that by allocating significant money towards other assets. If you had to do it over, what would you do different?

george

Hi, Chris. thanks for your reply. hindsight is 20/20. what I would do differently is not to pay off mortgage aggressively, especially after the market crash in 2008 and mortgage rate coming down to record low. I could’ve invested more in the stock market and could increase my net worth by maybe $150K or so. But again, I was a bit scared of the stock market and could not resist temptation of “being mortgage free”.

Many people pay off their mortgage aggressively because it allows them to sleep better at night, and that’s valid. Sure, that decision might not be the best option financially-speaking, but the right approach is to weigh all the pros and cons, which includes the intangible benefits.

Kim

I agree with the people who say buying a house is a priorities thing. I don’t care if my house is a good investment. I care that nobody can tell me that I can’t have my dog there. He’s 165 pounds and the area I live doesn’t have many pet friendly rentals, let alone one’s that don’t have a weight limit.

I did make sure to buy the least expensive house available that didn’t need major repairs because I wanted it to be the smartest decision I could in my circumstances. I also waited until I had 20% down saved since I didn’t want to take on PMI.

I wasn’t pressured to buy a house but I was 23 when I bought it, so I think it was too soon in my life for social pressure.

Hi Kim, that’s a valid reason to buy. I’m not against homeownership – as long as you do the upfront homework, and then make the decision, I’ll be your biggest fan. So, I’m your biggest fan!

In your case, the freedom to have a dog is worth more to you than the potential opportunity cost of tens of thousands of dollars (or more).

Buying a house as an investment is way different than buying a house, living in it, and thinking it’s the best investment. According to polls, the majority of people do the latter.

jimh009

First off, I’ve always had issues with people considering a house (at least their primary residence) as an “investment” per se. A house, ultimately, is a place to live. By keeping that in mind, it helps prevent a lot of problems – as it forces the person to fully analyze the situation. Can they afford the mortgage and other expenses year after year? Is the full price they are paying reasonable? Will they enjoy living here? Is their job secure? Do they want to “stay put” for at least 5 years or more? Is the area the house located in nice? And is the town growing…or is the town becoming the next Detroit? And the list goes on….

By keeping questions like that in mind I think a person will be much more likely to better decide whether to rent or buy.

Whether a house is right for you or not really does boil down to one thing…you’re own personal situation.

For me, buying a house back in the depths of the housing bust in Nevada made absolute sense. The price had dropped 70% from bubble peak highs. The price had dropped so much that I was able, with the help of family and drawing down my most of my savings, to pay cash for the very nice townhome I bought (and in a very nice neighborhood).

I hated drawing down my savings, for sure – especially since I don’t make much money (the savings had taken a long, long time to grow). Yet I was willing to spend most of my savings to buy this townhome because it substantially lowered my cost of living while substantially boosting my quality of life. While there are still property taxes, HOA fees and interior maintenance…the costs of those are way, way less than renting even the cheapest apartment in town. And to rent an equally nice apartment as my townhome would be, quite simply, prohibitively expensive – so expensive it would take at least half or more of my after-tax income.

But by paying cash for the place, my cost of housing is almost so cheap now that it would be more expensive to be homeless than to live here. And with that comes a huge peace of mind…especially if you’re self-employed like I am.

Everyone needs a place to live. Don’t underestimate how nice it feels to know that you can’t be booted out of your house by a bank or have the landlord pound on the door asking for more money each and every year.

So that was my situation…and it worked well.

But no doubt, for others buying a house makes no sense at all. This is especially so if the person has to raid their savings, buys the most expensive house they can afford (always a mistake since they often become “house poor”), and then takes on a mortgage payment that is equal (or more) to the rent they were paying. In cases like that, there is indeed the real possibility of becoming “chained to the house” and making a huge financial mistake. Not to mention the constant stress of worrying about how to pay the mortgage each and every month.

Lastly, I have one fairly major quibble with your otherwise pretty good analysis. You’re forgetting rent will, over time, increase. How fast it increases depends on where you live and such (Madison isn’t the world’s cheapest town, for sure). But you can bank on rent slowly increasing over time. As such, your math is shaky in this analysis. A $800 rental today will almost certainly be $1000 in ten years or less. And who the heck knows how much it will be twenty years from now.

In this age of “flat incomes” for most people, a slowly rising rent can be lethal to their finances. By owning a house (either owning it outright or with a fixed rate mortgage), the person has at least “stabilized” their largest housing related cost. Yes, other expenses will rise (even if the Fed says there is no inflation!). But their monthly mortgage payment will be the same ten and twenty years from now as it would be today. And over time that can be a huge savings.

One last thing in this long comment. Historically, the data over 100 years is quite clear. Prior to the big
housing bubble (and bust), when measured on a national level house
prices have, on average, risen to match inflation but generally no more. When viewed through that prism, buying a house to be an “pure investment” like stocks is a poor choice. All the more so since there are fixed costs to owning the house that, in many cases, will negate any price gains the house has.

Ding ding ding! I loved reading this. Thank you for sharing your insight, and the analytical approach to housing. Not just with me, but for everyone reading these comments.

It makes me really happy that you get it, but many people (and I get emails from them) refuse to believe a house isn’t the best investment, even though the data from Shiller has shown the inflation-adjusted return on housing – over the long-term – is essentially zero percent.

My purpose is to help educate, and spread knowledge, so thanks for taking up the mantle and doing the same.

James

Let’s all just admit it you buy the new car and the good house to get the girl. That’s what it all comes down to if you really break it down. Your friends if they really are your friends shouldn’t care about any of those things, the same goes for your relatives. You do all of this stuff to simply impress a girl you barely know to make ourselves look more of a success. It’s not worth it.

I got pressured into buying one because that is what my wife had to have. I do regret it due to the constant upkeep, lawn BS, Paint, appliances, stupid neighbors, etc.

Mike W

I just purchased a house because I thought it would be better than renting. I too was under the belief that renting was just throwing away money. I found a town house that I really liked, and I thought that I had done all of my research, but oh how wrong I was.

Now that I have been here for a while, I really do not like my neighborhood and even feel a little unsafe there. If I was renting I could just leave at the end of my lease, but now I have to contact a realtor and have them sell it at 6% of the sales price, plus the buyer may ask me to pay closing costs, plus there may be repairs, etc…

I often think to myself that I could have used the down payment money for so many other things that would have been more beneficial. That is life and learning for you. Unfortunately, I don’t think I can get what I have into my house and I may have to bring some money to the table at closing. overall, its ending up, with maintenance, repairs, time, improvements, etc. it would be cheaper to rent.

My advise to anyone looking to own a home is that you know you want to spend at least the next 10 years in that location.

Yup, I have felt the intense social pressure and shaming of being a renter for most of my adult life. It happens so much that I now refuse to talk about where/how I live and I quickly change the subject. I don’t tell people how to live their lives yet people who have mortgages and “own” their homes (um, if you have a mortgage the bank technically owns your home) seem to feel a need to continually ask me *when* I’m going to buy. “Why are you throwing your money away on rent?”

I have saved so much renting that I am a millionaire. But it’s not good enough, and naturally, I don’t tell these nosey people how much money I have. Maybe I want to have free time, travel, and live a more leisurely life and not have to worry about gutters, leaking basements, lawns and pest infestations? Maybe I don’t want to have to call a plumber? Maybe I’d like to retire before I fall apart? Maybe as an “owner”, I don’t want to be stuck next to an insufferable or loud obnoxious neighbor? What do you care?

I don’t get it. Why do mortgage holders and home owners feel the need to tell ME what to do about my living arrangements? I am OK, thank you very much, and when it’s time to buy and I WANT to buy, I will buy. Right now housing prices are increasing at dramatic rates throughout all of the US cities. Methinks a crash will soon be upon us….OK, maybe in 2017 but I don’t agree that “it is different this time”. In the meantime, mind your own business and lay the hell off me: the poor, unfortunate, lowly millionaire renter (who by the way has a much easier and less stressful life than you, my home”owning” peer!)

I find it fascinating that society loves to highlight athletes and tech CEOs, but the minute you take a different path, you realize the world wants you to be vanilla.

It’s no surprise that we tend to do what everyone else does. So yes, you have to own a house if you can afford to because that’s just what you do.

NPAFromFLA

I realize I am late to the party, seeing as this is a couple of years old, but I’ll offer my insights anyway.

Your assertion that purchasing a home is a bad financial decision is wrong on many levels, as some others have already pointed out.

I pray that you are not a financial advisor because you fail. You fail to adjust for CPI when calculating value yet CPI is inherent in any market ROI. Sure, a home purchased for $5k in 1890 won’t be worth $8m, but it will be worth some $130k, perhaps significantly more depending upon the market.

Further you fail to take into consideration that you purchased your home at the height of a stupid market where valuations were arbitrary and had no real association with the true value of a property. In other words, the value of your $200k home was probably more in the $135k range. Indeed, you made a bad financial decision, but purchasing a home wasn’t the problem, paying a stupid price was the problem.

Finally, you don’t say how much you “lost” when you sold your home, but lets make a few assumptions. I’ll assume your $200k home was eventually sold for $160k, leaving you with a $40k deficit, plus 11 years of mortgage payments, taxes and insurance so your cost of ownership was roughly $200k for 11 years, or roughly $1500 per month before your tax savings. I’d imagine that someone with significant real estate holdings you itemize your taxes. Your tax savings of roughly $60k over the same time period brings your total cost of ownership down to approximately $1060 per month. Over the course of the mortgage, some of that payment went to principal, principal that would have brought the initial $160k down to about $130k, meaning you received roughly $30k back from your home sale. Your monthly cost is now $835 per month. Your savings over rent is approximately $400 per month or $53k.

Bottom line is you invested $40k, paid rent for 11 years, received real tangible savings of $113k and got a windfall of about $30k when you sold. That adds up to turning a $40k investment into $143k over the course of 11 years. That is equal to 12.3% ROI.

You seem to be more upset over the fact that you made a poor choice to buy an overpriced home rather than buying a home.

In the interest of disclosure, I own many properties and ownership, even as an owner residence is a valuable asset.

I doubt seriously you could have paid that or less for rent during the same time frame.

T_r_u_t_h

In addition to the numerous other errors pointed out by others already, the pay stub appears to be your second, not your first, as the YTD totals exceed those of the current period shown.

Also, you neglect the soft benefits of home ownership, which to many may cancel out the soft negatives: ability to remodel, paint, landscape as you please, no uncertainty regarding rent increases or evictions, floorplans, amenities, and overall quality is generally better for owned versus rentals, pride of ownership and just about every positive social indicator you can can name from voting to community involvement, etc., is higher for owners over renters, so living next to owners is better than living next to renters and and few rentals fall into that category, and on an on.